Microsoft ships first Windows OS for vertical market

Microsoft Corp. has begun supplying a version of its Windows XP Embedded operating system tailored to the retail and hospitality industry, marking the first time that the company has customized an operating system for a particular market.

Windows Embedded for Point of Service (WEPOS) is aimed at applications such as point-of-sale systems, in-store information kiosks, self-service checkout systems and gas pumps, said Jason Demeny, product manager for WEPOS at Microsoft, in a telephone interview.

Its development was announced last year and Microsoft will announce later Tuesday at an industry conference in Chicago that it has begun shipping the OS to partners. The operating system is based on Windows XP Embedded with Service Pack 2.

"WEPOS is the first time we have developed an OS specifically for an industry vertical," Demeny said.

The retail and hospitality industry spends billions of dollars every year on IT and Microsoft's operating systems already dominate the market, according to estimates from IHL Consulting Group. In North America, 71 percent of systems shipped in this sector were based on Windows while in Europe 56 percent were based on Windows NT/2000/XP, according to an IHL report published in April.

Compared to current and previous versions of Windows, the new operating system offers several advantages, Demeny said. One of the major advantages is plug-and-play support for devices compliant with version 1.8 of the Unified POS standard that has been developed by the U.S. Association for Retail Technology Standards.

"The real value here is that it allows a quick upgrade that doesn't take time," said Demeny.

Current retail systems are typically written to support a limited number of peripherals and so integrating new devices can take a period of several weeks, he said. That means retailers are much more likely to limit the introduction of new technology during the average 10-year lifecycle of a system. Unified POS makes it possible to add a new device in the same way a PC user might plug in a new USB mouse and so it enables retailers to more easily take advantage of new technology, he said.

Microsoft partners are developing Unified POS products and systems and they will be listed in an online catalog on its Web site. These companies include Dell Inc., Hewlett-Packard Co., IBM Corp., NEC Corp., Seiko Epson Corp. and Symbol Technologies Inc.

WEPOS is targeted at medium to large-size retailers and is already being evaluated by two major U.S. companies: OMX Inc.'s Office Max and Rite Aid Corp. The software will initially be available in eight language versions: English, French, German, Italian, Spanish, Japanese, Simplified Chinese and Traditional Chinese.

Microsoft's launch of WEPOS comes as shipments of Linux-based operating systems are increasing.

Shipments of systems based on the open-source operating system grew 34 percent in North America last year, according to IHL, but Linux accounted for just 6 percent of the market. In Europe Linux-based systems accounted for 5 percent of shipments last year and this could grow, said IHL. It said a significant number of users with DOS-based system users are likely to use Linux in the future.

"Microsoft has had a significant presence providing products for the retail industry and we are increasing our investment in this space," Demeny said.

He said the increased investment takes the form of a product team working on developing WEPOS and additional staff worldwide, totalling about 400 people, that are working solely on the retail and hospitality sector.